Making Tax Digital (MTD) is part of the Government’s plan to modernise the UK tax system, making it easier for people to get their tax right. It means individuals and businesses will need to use MTD-compatible software to keep digital records and submit returns.
Make sure you’re prepared for what’s ahead with our timeline of important changes.
A closer look at key Making Tax Digital dates
April 2019: MTD for VAT - over £85,000 threshold
April 2021: Digital links
Digital links become mandatory for MTD for VAT. A digital link is a data transfer within and between functional compatible software — for example, adding VAT inputs and outputs to a spreadsheet and using a cell formula to calculate the totals. Manually copying and pasting data does not count as a digital link and is no longer allowed under the government’s MTD rules.
April 2022: MTD for VAT - all VAT-registered businesses
All VAT registered businesses, regardless of turnover, must sign up to MTD for VAT and follow the rules for submitting returns.
April 2026: MTD for ITSA – £50,000 threshold
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) comes into effect. Sole traders and landlords with a total annual income above £50,000 need to use MTD for ITSA compatible software to keep digital records and file returns.
Make sure you have HMRC-recognised software in place before April 2026 and ask your software provider how to sign up for MTD for ITSA. Your accountant or bookkeeper will be able to help you with this.
April 2027: MTD for ITSA - £30,000 threshold
Sole traders and landlords with a total annual income above £30,000 need to use MTD for ITSA compatible software to keep digital records and file returns.
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